Productivity drives job-creation
Minimum wage’s stifling of employment hits low-skilled workers hardest, study shows, writes Bronwyn Nortje
The debate around a national minimum wage would not matter if SA’s workforce was more productive. On a flight to Johannesburg last week, I sat next to a Hong Kong businessman who has been living or doing business in SA for almost 20 years. I asked him the standard question I ask all foreign businesspeople: "What can SA do to make doing business here easier?" The usual answer includes some variation of reducing red tape and lessening exchange controls, but this gentleman’s answer was unequivocal: make South Africans more productive. "South Africans don’t seem to understand that productivity drives profitability, and profitability determines sustainability," he explained. "In Hong Kong, everything is about added value. The first thing prospective employers or business partners ask is, ‘How can you add value to my business?’" When you look at it like this, it seems remarkably simple; an employer can only pay his workers as much as they contribute to his business. If you pay someone R5,...
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